Efficiently and effectively managing customer returns has always been an important part of the retail business. With the rapid growth in online shopping, credit cards occupy a major place in the business of buying and selling. This vital role has also seen rapid growth in the number of credit card chargebacks in recent years.
Chargebacks are a normal part of the process of dealing with customers. Credit card companies expect them at a reasonable level and have processes in place to handle them. However, the overall issue of credit card chargebacks has become a massive issue for many sellers and merchants. Too many chargebacks or the wrong type of chargebacks can have a very negative impact on an online business.
This includes an increase in process fees or, in the worst case, being dropped by processors and losing the ability to offer products and services to customers with credit card payments as an option.
Also, chargeback fees are often very expensive for merchants. These fees can run to $20 to $100 per transaction and those eat into or eliminate profits from other transactions.
There are well-known guidelines and best practices that can minimize the number of chargebacks a merchant encounters. However, online merchants face special challenges and cannot apply some basic verification processes to prevent fraud and abuse. That is why chargeback management software is now an increasingly important tool to tackle the chargeback challenge. Dealing with chargebacks involves three important steps, each of which is easier to manage effectively with well-designed chargeback management software.
These three-phases include: